Barrel of Monkeys now value some-more than a tub of Alberta oil
The cost of shopping a tub of Canadian oil fell to reduction than a Barrel of Monkeys on Thursday as a oil cost again crashed to record levels.
Western Canadian Select (WCS) was offered for $6.45 US a tub Thursday, down $2.84 US from a day earlier. That’s next final week’s record when it sole for as low as $7.63 US a barrel.
The WCS cost averaged $36.82 US a tub in January, according to a province.
To put that into perspective, a tub of Alberta oil is now worth $9.08 Cdn, that is less than a Barrel of Monkeys Game, a litre of Petrelli Extra Virgin Olive Oil or a 30-gram tube of Polysporin, each $9.99 at London Drugs.
The impact of plunging prices has forced a series of Canadian oil producers to condense their collateral spending skeleton this year and trim behind production.
But some analysts trust oil prices could still get most lower.
“Crude from Canadian oil sands could good proceed 0 over a entrance weeks,” says a investigate note from JBC Energy.
“Even if money earnings spin negative, it is not a given that prolongation will be close in, generally in exhilarated reservoirs during Canadian oil silt plays. But this time a conditions is simply radically different.”
Others contend oilsands bitumen is already worthless. That’s since WCS is a mix of bitumen and an ultra light oil that helps pierce a oilsands product by a pipeline. Right now, a ultra light oil is value extremely some-more than WCS, that implies a value of bitumen is lower.
“Looking during bitumen pricing, it is 0 to negative. So, it’s as worse as it gets,” said Martin Pelletier, a portfolio manager with TriVest Wealth Council in Calgary.
“The longer it sustains itself, it will be inauspicious for Alberta, and not only Alberta, though a rest of Canada.”
Oil and gas sojourn one of a country’s tip exports, contributing significantly to supervision revenues. The oilpatch is watchful to see what kind of relief package a sovereign supervision will provide.
“It’s all hands on rug for a series of these companies. It’s presence mode,” pronounced Pelletier.
The cost of West Texas Intermediate, a North American benchmark, also fell on Thursday, to $22.60 per barrel, down $1.89 US a barrel.
Oil prices are being strike by a infamous double whammy: a wanton cost fight between Saudi Arabia and Russia, and plunging direct as COVID-19 crushes consumption.
Rystad Energy, a Norway-based appetite investigate firm, says a situation has combined such a vast tellurian over-abundance that Western Canada’s oil prolongation will need to be cut by some 11 per cent, or 440,000 barrels per day.
The nation is days divided from using out of accessible storage capacity, it said.
The impact isn’t only being felt by oil companies though governments as well.
“Lower oil isn’t good for Canada’s trade balance, and a Alberta economy will take nonetheless another hit,” according to a investigate note from BMO’s Benjamin Reitzes.
“One some-more reason to consternation because a Bank of Canada has hold off on slicing rates further, withdrawal process rates as a top in a grown world.”
Article source: https://www.cbc.ca/news/business/bitumen-wcs-wti-oil-1.5511386?cmp=rss